Quarrel over public debt ratio


Public debt figures released yesterday have prompted a political debate. Hungary’s public debt reached HUF 25,432 bln or 85.1% of GDP by the end of the first half, rising from 84.4 % at the end of March and from 79.4 %  at the end of 2013.

Hungarian opposition parties Együtt-PM and Democratic Coalition (DK) reacted by saying the numbers show Prime Minister Viktor Orbán and central bank governor György Matolcsy have lost the war against public debt. According to DK MP László Varjú, the tendency could lead to another excessive deficit procedure launched by the European Commission.

Far-right wing Jobbik party said the government had failed to meet the planned annual public debt ratio and urged it to start immediate negotiations on the rescheduling of the national debt.

Left-wing opposition Socialist Party claimed the government should give up its plan to use a €10 bln loan from Russia for upgrading the nuclear plant in Paks. Socialist head of parliament’s budget committee blamed the government for the record high debt and said the “deliberately weakened” forint and the government’s “unpredictable” economic policy put a heavy burden on Hungarian families.

Green-centric LMP reminded the government of its earlier pledge to reduce national debt, which would require dropping “luxury development projects” such as the Paks upgrade or the central bank’s purchases.

Ruling Fidesz party responded by putting the blame on leftist parties and on the previous Socialist governments who “ruined the country and made it vulnerable through their perilous economic policies”. The country is now fiscally stable and the economy has been put back on a long-term growth path, while employment is at a record high, Fidesz stated.

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